One of the most important things to do that most recent graduates put off or neglect is to plan for retirement. Yet, many twenty-some year olds find themselves wondering whether or not they should pay off their loans first or buy that shiny new car instead of planning for retirement. Some haven’t even begun thinking about retirement. After all, retirement is forty years away, why bother now right?

Wrong.

Personally, I feel that planning your retirement by investing in your 401(k) and Roth IRA has never been more important. With the increasingly non-existent social security, your 401(k) and IRA will probably be the only money sources keeping you alive and happy in your old age.

Investment Adviser Firm, Charles Schwab, published an online article giving three very good reasons on why we should put our money into a retirement fund and do so as early as possible.

One, tax-deferred savings give you a bigger bang for your buck compared to just putting your paycheck into a savings account. In other words, you’ll get more money after you retire by using tax-deferred investments such as a 401(k) or Roth IRA since you won’t have to pay taxes on any gains you earn from now until you retire.

Two, most companies will match your 401(k) contributions, which means companies will help you with your retirement fund by putting in a dollar for every two dollars you contribute, assuming they’re matching you 50%.

Three, starting now while you’re young will put you in a much better position in the future. Simply by starting your investments while you’re twenty-five instead of forty-five, you can nearly double your assets by the time you retire. Not bad huh?

Putting off your investments is a sure way to leave you feeling lost and frustrated when you turn forty and realizing you have virtually very little money saved up for retirement. So instead of scratching your head and wondering what to do with your money, start putting it into the bank and let the egg laying begin.

Later we’ll go deeper into investing for the future.

Should a 20-Something Invest for Retirement? from Charles Schwab & Co.